Television Viewers Continue to Cut the Cord

Looking ahead, various developments in the media industry could impact the future trajectory of cord-cutting. Streaming services, for instance, have been increasing their prices, which may influence the rate at which viewers choose to cut the cord. Moreover, Cahall suggests that strikes within the Hollywood industry could favor streaming platforms over linear TV, given streamers' ability to maintain longer content pipelines.

Overall, the continued surge in cord-cutting reflects the changing landscape of television consumption, as viewers seek more flexible and affordable alternatives to traditional TV services. #Opinion: Disney's Relentless Pursuit of Profit Damages Streaming Industry

Loop Capital's Alan Gould recently expressed optimism about the future of Netflix Inc. (NFLX, +2.11%) shares, citing the potential impact of ongoing strikes. According to Gould, as the upcoming TV season will largely consist of sports, unscripted programming, and library content, there is a high possibility that more people will turn to streaming platforms.

It is no secret that traditional media companies such as Walt Disney Co. (DIS, +0.55%) are currently facing immense pressure on their advertising and affiliate revenue due to cord-cutting. Consequently, they are grappling with finding a way to ensure profitability in the realm of streaming.

Additionally, Wells Fargo's Cahall suggests that Fox Corp. (FOXA, -0.45%) remains the most vulnerable entity within the media industry, as nearly half of its estimated 2024 sales revolve around domestic affiliate revenue. In contrast, other media companies possess larger alternative businesses, which significantly decreases their relative risk. It is worth noting that Fox and parent company News Corp. share the same ownership.

In terms of broadcasting, Cahall believes that Nexstar Media Group Inc. (NXST, -0.27%) and Sinclair Inc. (SBGI, -3.62%) face the highest risk in terms of retransmission estimates.

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